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Trump’s Tax Cut Was Supposed to Change Corporate Behavior. Here's What Happened.

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https://www.nytimes.com/2018/11/12/business/economy/trumps-tax-cut-was-supposed-to-change-corporate-behavior-heres-what-happened.html

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Mr. Trump and Republicans hailed those announcements as evidence that the law’s benefits were flowing substantially to workers. Americans for Tax Reform compiled a list of 750 companies, and growing, that said they would pass tax savings on to workers in some form.

 

Data from large public companies, however, suggest that most workers received relatively small shares of their employers’ corporate tax savings.

 

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Many companies also said they would use tax savings to create jobs. But the Just Capital research finds that, since the tax cuts were passed, the 1,000 largest public companies have actually reduced employment, on balance. They have announced the elimination of nearly 140,000 jobs — which is almost double the 73,000 jobs they say they have created in that time. About half of those net losses came from companies in the restaurant and leisure industries, the analysis found.

 

 

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It’s highly unusual for deficits and borrowing needs to grow this much during periods of prosperity. A broad variety of analysts attribute the widening deficit to the tax cuts (along with increased military and other domestic spending ushered in through a bill Mr. Trump signed earlier this year).

 

Corporate tax revenues are down one-third from a year ago. Federal revenues as a whole ran $200 billion behind the Congressional Budget Office’s forecast for the 2018 fiscal year — even though economic growth was faster than the C.B.O. expected.

 

Wages:

 

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Nearly a year after the cuts were signed into law, wage growth has yet to pick up when accounting for inflation. In September, the Labor Department reported that inflation-adjusted wages had risen 0.5 percent from the year before. That’s a slower rate of growth than the economy itself experienced in September 2017, when it was 0.6 percent.

Growth has accelerated in nominal terms. Median wage growth was 3.5 percent in September, according to calculations by the Federal Reserve Bank of Atlanta, up from 3 percent in January, but still below its recent highs in 2016. Growth in the Employment Cost Index rose from 2.9 percent at the end of 2017 to 3 percent in the third quarter.

 

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55 minutes ago, 2user1cup said:

No way

 

How the FUCK do you say this and not JUST POST YOUR AVATAR?!

 

GUILLOTINE FOR YOU :guillotine:

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31 minutes ago, SaysWho? said:

 

How the FUCK do you say this and not JUST POST YOUR AVATAR?!

 

GUILLOTINE FOR YOU :guillotine:

 

SAYS WHO?!?!

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The whole "tax cuts will increase employment" thing never made any sense to me. If an extra employee is required to increase profit, that person will probably get hired regardless of the total tax rate. If the tax cuts were specifically to employee related costs, that might change the calculus a little, but these were mostly overall, individual tax cuts. Especially when unemployment is so low, there's just no sense in the idea that companies would magically start hiring more folks just because they're making more money.

 

That they're taking the extra money and putting it into technology that eliminates jobs isn't an obvious outcome, but it sure makes good corporate sense.

 

None of that really matters though, because it's operating on the assumption that they were being genuine in their arguments for these tax cuts. At the end of the day they wanted to cut taxes for themselves and the other wealthy people they're surrounded with: donors, friends, lobbyists, etc.. It was always a cynical ploy and none of their arguments were ever made in good faith. Debating with the ghosts of their feigned intentions is wasted effort.

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38 minutes ago, marioandsonic said:

How the fuck do people still think trickle-down economics is a real thing?

GOP favors supply side economics and their policies usually favor it.

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17 minutes ago, TwinIon said:

The whole "tax cuts will increase employment" thing never made any sense to me. If an extra employee is required to increase profit, that person will probably get hired regardless of the total tax rate. If the tax cuts were specifically to employee related costs, that might change the calculus a little, but these were mostly overall, individual tax cuts. Especially when unemployment is so low, there's just no sense in the idea that companies would magically start hiring more folks just because they're making more money.

 

Without looking at any data, I'd guess that you probably see the claimed effect with the very smallest employers, where reducing their tax burden could actually have an appreciable effect on their after-tax profits. Especially since they're not going to be able to afford the army of lawyers/accountants to minimize their tax bills. But if you're a big public company then yeah, if you're already making hundreds of millions or billions of dollars of profit a year then wiggling around the tax rates is clearly not going to really affect hiring even before you account for their obvious incentives to just divert the saved money to their shareholders.

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6 hours ago, TwinIon said:

That they're taking the extra money and putting it into technology that eliminates jobs isn't an obvious outcome, but it sure makes good corporate sense.

 

That's makes all the sense in the world and was obvious result of these tax cuts. If you have all this extra money coming in that you believe might not still be there four years down the road, then you invest in something that will be there four years from now. Since you can't rely on people and since hiring people isn't a front-loaded affair, the obvious solution then is to invest in technology.

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